I've read this book a couple times. I like it, but it's important to understand this is not a book about a stock trader. It's a book about a problem gambler who happens to gamble on the stock market. One of the biggest trade in the book is just a hunch the character has, and they make bank because of an earthquake. Having an act of God rescue your position is not a strategy.

There's a part where he sets up a trust so that his family will money the next time he goes bust (which happens constantly in the book), and tells his wife that he will beg and plead for the money but she has to refuse him. That feels to me like the behavior of an addict capitalizing on a moment of lucidity to protect loved ones from their addiction.

The real Jesse Livermore died penniless by suicide. The book doesn't address his depression, but I think you do see it in what's not in the book. They don't really talk about the character's friends. They don't seem preoccupied with their wife or their children.

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abstractcontrol 6 hours ago | parent [-]

One takeaway from the book is that trend following strategies are really difficult to follow. Jesse Livermore had a 3 yearlong losing streak from 2011 - 2014 despite him following his rules. After the events of the book, he went short in 1929 and was reportedly worth over 100m in that time, a huge amount. Then he lost it all in the strongly mean reverting markets of the 1930s where his trend following strategy didn't work.

He was a problem gambler, but I think if we looked at top poker players of today, they'd all have some love the gamble in them. Jesse had godly tape reading skills that allowed him to beat the bucket shops at the start of his career.

After being kicked out of the bucket shops, he should have just become a floor trader and in all likelihood, he'd have had lower highs but would have fared a lot better overall. A lot of the trading cliches like cutting trading losses quickly, letting profits run, averaging up rather than down originate from this book. There is a reason people still talk about it 100 years after its publication. It's a good contender for the best trading book of all time.

	▲	maxbond 5 hours ago \| parent [-]
		All it takes to make and lose a huge fortune is capital and a high variance strategy. Whether that strategy is informed by legitimate genius is immaterial to the final outcome - you bust badly, exhaust your credit, and are unable to stay in the market and score next big the windfall which you were counting on.